Raph Koster has a post about video game costs, which in large part is a continuation of the discussion from TAGN blog about the topic. In terms of game devs, I like Raph (I obviously don’t know him personally), but I can’t help but disagree with him more on his post. The linked video does a great job breaking down the AAA market, but as someone who isn’t a console gamer, the AAA market is just a tiny fraction of my overall gaming.

Before I go on, I do want to make clear that I think gamers are as much to blame for all of this as developers. Yes, many developers are scum like the hotbar salesman, but they only exist because gamers exist that buy said hotbars. If the majority of gamers had rejected MTX originally and not until SW:BF2, the whole concept would never have taken off. Sadly we can’t do much about the gamers but help to educate them, and that’s a slow process. Even when the ultimate ending in SW:BF2 was a complete wiping out of MTX (for now), you still had people defend the decision to give EA money for that game pre-release, so it’s a hard battle.

First, I understand why MTX makes sense for game devs, and I also think it makes sense for gamers. We now live in an age where a game can easily be supported post-release, which is very different prior to the internet and buying a disc/cartridge. Getting patches, downloading expansions, having mod access, all of that is possible today and makes gaming better.

If I love a game, the absolute best thing that can happen is for the devs to continue supporting it, because that means I get more of what I love. I was sad when Mordheim development stopped because I loved Mord and wanted more. Same for Battle Brothers. And I am willing to pay for that support, so long as its reasonable in both price and in what it adds, so I’m not saying to completely remove MTX and go back to only a box price. I’ve spent hundreds of dollars in LoL, and it’s easily some of the best money I’ve spent in gaming, so MTX done right is AWESOME.

The major problem with a lot of MTX is that their addition makes the base game WORSE. It’s the F2P in MMOs topic all over again, where we have yet to see an MMO become a better game due to F2P, because it’s almost by definition impossible. Games CAN be better thanks to MTX (LoL is by far the biggest and best example of this), because they fund future development without negatively impacting design. But when incompetence or greed kicks in, you get something like SW:BF2, where a decent game is made significantly WORSE by MTX. There is no argument that can be made that SW:BF2 is better because you can spend money to unlock power. Pushed further, there is no argument that can be made that a competitive game is better when some of the power is initially locked, and you have to grind or pay to unlock it. Imagine if in LoL every champ started with their ultimate locked, and until you paid or grinding, you couldn’t use it? Would anyone argue such a model would make LoL feel more ‘rewarding’? Of course not.

“You can see this in MMOs now — where just getting 100k people subbing to something ought to make a highly satisfactory viable business… but go look at player reactions to visuals that aren’t at the absolute top end.” – Raph

The quote is about MMOs specifically, but since that genre is on pause (and no one would call upcoming titles like Crowfall or CU top-end visually), lets look at gaming overall.

PUBG looks like ass compared to most shooters. Its the highest selling game of the year by a mile. Take a look at the most popular games on Steam and tell me how many of those have AAA graphics? CS:GO doesn’t. DOTA2 doesn’t (nor does LoL). Payday 2? Team Fortress? Rocket League? RUST? Sure, there are also games like GTAV, which at release had good graphics, and also games like Rainbow Six, but the point is that the top games aren’t exclusively AAA-quality in terms of graphics, or even that the list is dominated by such titles.

The same can be said for polish. It’s helps, no doubt, but it’s clearly not a must-have. The be-all end-all of gaming success if if your game is fun. That’s it. If your game is fun despite looking like garbage and having a mile-long list of bugs, people will buy it. They bought ARK, they bought RUST, they bought DayZ, and they are buying PUBG. Divinity:OS2 just crossed the million copies mark, and go look at it’s post-release history of patch notes to see just how polished that game was (and while it has nice graphics, no one is calling them top-end).

On the topic of raising box prices. Remember when ARK left early access and went up to $60? Or how PUBG has never gone on sale from it’s $30 price point? Notice how successful Steam games don’t hit the 50% or 75% Steam sale for a while, yet we see failed new releases getting massive price cuts shortly? It all shows that while box price is a factor, its also relative to the actual quality of a game. If a game is really good, it can have a high box price and avoid sales and still move copies.

This topic really is less about the rising cost of games, or whether model X is better than model Y, and more about corporate greed and how some gamers support terrible MTX design. Companies exist to make money, of course, but part of the ‘make money’ thing is to also to stay in business and continue to make money. It’s not a good business move to raise profits by 50% in a quarter by sacrificing the next five quarters. Predatory and flawed MTX is exactly that; it’s cashing in now by duping some gamers only to hurt everyone later on. SW:BF2 might have been the tipping point, where EA had a good game that would have been profitable with solid (in this case fluff-only) MTX, but because of greed put in predatory and ‘bad for game design’ MTX instead, and the result has been a massive hit to their stock price already, with likely more fallout coming when the actual impact to SW:BF2 is better understood.

The video game business model is not just fine, its actually the best it’s ever been. If you make a good game, you will not only get rewarded with sales, but also have the potential to make more money on top with solid MTX. The problem many devs struggle with isn’t rising costs or being bullied out of the market, its in creating a good game. Fix that problem and you will do just fine.

23 Responses to High cost, low cost; a good game sells, a bad one struggles

“…you still had people defend the decision to give EA money for that game pre-release, so it’s a hard battle…”
I actually decided to stop reading Keen after his position with SW:BF2, so that is my form as a reader to not endorse gamer-bloggers who endorse companies like EA.

Flatly, a small indie could not have made PUBG, regardless of what you feel of its graphics. Last I heard the dev team was 80 people or so. That said, it’s still just an outlier (a huge one, PUBG is equivalent to LoL, WoW, Starcraft, Minecraft, a massive blip).

“This topic really is less about the rising cost of games, or whether model X is better than model Y, and more about corporate greed and how some gamers support terrible MTX design. Companies exist to make money, of course, but part of the ‘make money’ thing is to also to stay in business and continue to make money. It’s not a good business move to raise profits by 50% in a quarter by sacrificing the next five quarters.”

This I utterly agree with. Quarterly profits though, are a motivators from Wall Street, so that’s a hard battle to fight.

It comes down to this: we may all hate this world, but we have to have viable alternatives to it. We can’t just wave a wand and wish it weren’t so. Yes, MTX has all the negative effects you describe. But we need alternate models that work if it’s going to get replaced. And those alternate models can’t drop the audience or current revenue on the floor in the process.

PUBG had 35 devs initially, and was produced in basically a year on a pretty small budget, which is why so many of its art assets are/where free public ones that are only now being replaced. The dev team is significantly larger now, sure, selling 20m+ copies helps with that, but original PUBG was made cheap and fast. In other words, PUBG isn’t anywhere close to ‘too expensive’ in terms of AAA titles, and is a lot closer in development story to say a Terreria or Stardew Valley than Assassins Creed.

And while its far from the typical story of a game, it’s not as far an outlier as WoW, where that is one game out of one in all of history to have 10m+ subs, while a game selling 20m+ copies is rare, yes, but not unique. The next PUBG-scale success could come out next month, while we can be fairly certain the next WoW-sized success isn’t.

Wall Street motivates profit and growth, but doesn’t demand short-term results. Especially not in the gaming sector, where quarter-to-quarter numbers can vary wildly based on release schedule. If gamers recognized that supporting, even indirectly, shitty MTX-based games hurts everyone but the shitty game maker, like they have with SW:BF2, it hurts revenue short and long-term (you’d think by now people would learn to stop buying EA games, but gamers being dumb is a tale as old as time sadly).

You’re final paragraph I think missed the point I was making. I’m not saying remove MTX. I’m not even saying remove all power-based MTX (all card games are basically that, including the random ‘lootbox’ part, and that’s fine, as that genre is what it is). I’m just saying apply it when it makes sense. A competitive FPS has no business selling power, random or otherwise. An MMO has no business making the game shitty (limiting your hotbars) to justify a F2P model, or to make the game unfun (grindy) to push people into a ‘convenience’ item shop. But expensive vanity horse armor (that fits the theme/setting)? Sure. A dozen Teemo skins in LoL? Awesome. Event-based loot crates with clothing ala PUBG that after the event get sold for 20x the original price? That’s 2017 gaming baby, and it’s great.

Edit: Also that second link? Um… that piece is wrong in so many ways I have no idea why you linked it. I had a longer reply directly to it, but it got kinda silly, so I’ll just repeat that I hope you don’t agree with that one in terms of its analysis?

PUBG was backed by Bluehole; it wasn’t indie at all. But I’ll concede on the numbers on it, I don’t know too much about its development. It’s still a massive blip — not as BIG as WoW, but truly massive. We just can’t take it as representative, is all I was getting at. It shows it is *possible*, but it’s also *possible* to win the lottery.

The real story PUBG tells is one of finding a niche where AAA isn’t. That’s a necessary ingredient for survival, I think.

It’s also worth pointing out that PUBG is, in itself, a service game — the sort of business model AAA needs to move to, and is sorta-kinda trying to move to with stuff like lootboxes. (Though, ironically, resalable loot crates are more at risk of being declared online gambling than non-resaleable virtual goods). Service games are increasingly the second ingredient.

I think the big separator is console gaming vs PC. On a console, you really can’t aim to make a niche game like a Stardew Valley or Banished and suddenly have them explode. On PC you can, easily, and it works. We have seen it over and over. My point in bringing those up is simply to say that yes, you can spend AAA-level money and profit in gaming. But you can also spend a few thousand and profit as well, along with everything in between. And you DON’T need predatory MTX to get that profit. What you DO need to do is make a good game. The Zynga days of producing shit and profiting because millions don’t know better are over, and it’s time to return to making actually good games. Which can include some MTX, absolutely, just don’t include it at the expense of said good game, or it will (hopefully) backfire on you in 2018+.

It being hard is no harder (maybe even easier?) than in any startup business, which have around a 90% failure rate. And thanks to this blog, I’ve personally dealt with dozens of big and small devs at this point, including many one-man shops. I’ve seen many of them succeed, and others fail. I’ve yet to see one fail that delivered a quality game. Which isn’t to say all of them have been Stardew Valley, or even Banished, but they HAVE profited enough to continue making games, and people don’t general go into game dev to become rich (if you have the IT skills, there are far more profitable but sometimes soul-crushing career paths. Source: I’m on one.)

Ah well, it’s hard to debate against a subjective bar like “a quality game.” It can even be tautological: if it did well enough, then it was clearly quality and if not, it wasn’t.

I’m glad the devs you know are managing to repeatedly make games and see success, even at the “do it easily” bar of one in ten. :) Really, I am. But what I see from where I sit is an increasingly difficult landscape for an upfront sale game — almost impossible in some markets already, but it varies — and an increasing shift towards games-as-service. The increasing difficulty of the market has been an active subject of discussion among devs for quite some time now.

From that perspective, was a pre-Steam world easier for devs? Were conditions for devs better for those working on console or the odd PC game? Were choices and quality better/higher for gamers?

I’d say ‘no’ to all those. The gamer choice/quality part is undeniable, but from the outside looking/asking in, I’d also say game devs get paid more now, are more respected, and have more options (work at a big AAA house, a smaller indie house, or go solo/small team). They can try to get VC money, or Kickstarter, or Early Access, or Fig. There are more uncontrolled platforms (PC, mobile, web). Consoles are bigger in terms of audience. And yes, there are even choices now in business plan, rather than just trying to sell a box.

I just don’t think the choice/option needs to or should include predatory MTX. In any game, on any platform.

It’s more like there was a post-Steam sweet spot, before discoverability became a huge issue, and before larger players started outspending smaller players to try to own segments. Just like there was an App Store sweet spot, but we are way way past it.

FYI, VC money is just about gone for games. It was there for VR until about a year ago, but it dried up for other types for games several years back. KS is also mostly dead for most games… it’s used for marketing purposes by games that already have funding, these days.

I mean, if I had to sum up my arguments, it would be “what stops PC from becoming like App Stores?” App Stores went through the cycle I described at light speed.

I honestly don’t see PC gaming drifting towards what the app store has more or less always been. Even at its peak, the app store was always more about ports and clones than original quality titles. Sure, there are some, but those truly are the exception compared to PC gaming today or at any other point.

What stops Steam from being the app store is that PC gamers typically have a higher bar to clear than mobile gamers; the population is savvier hobbyists vs. bored commuter and the opportunity cost to play something crappy is significantly higher.

If I sit down at my PC to game, I have a number of installed games I can choose to jump into (LoL, FFXIV, Rimworld are my current go-to’s) or I can comb through a number of games that I want to play, but haven’t started yet, or (since I’m responding to Raph Koster) I can hunt down a 1999-era UO private server and relive my nostalgic glory days. I will never sit down and say “You know what I need? An uninspired Bejeweled clone!” and start hunting through Steam.

With mobile limiting what I can do and what is available, the low effort, uninspired dreck has more of an opportunity to capture my attention. Maybe I do want to play Bejeweled today, let me go grab an uninspired clone off Google Play! OK, I’m bored with this, what’s at the top of the most popular list… oh, I guess I’m in the mood to try a gacha game and this one sounds like it might have somewhat novel mechanics, let’s take a swing. Rinse repeat since I (at least I presonally) lack a cornerstone to pivot back to.

The fortunate/unfortunate (depending who you are) thing is that it will take a cataclysm for PC and Console gamers to be impacted by the suffering of game development companies and their costs. If 95% of AAA game development stopped we’d lose some good games, but there’s plenty of indies to fill the void and there are plenty of mid-range step-below-AAA game designs begging to get made and played, even if the graphics are a year behind and I can’t see my reflection in the pond. So while I absolutely think AAA development is at risk of some pretty bad things happening, gaming isn’t binary between having AAA development or having the app store; it’s have AAA development (and pony up for MTX) or have AA development.

With all that said MTX/DLC is fine, just do it right. Forgive them their sins, because it’s all they can do to save the industry is just not a reasonable stance towards places like EA that actively ruin games with it.

> What stops Steam from being the app store is that PC gamers typically have a higher bar to clear than mobile gamers; the population is savvier hobbyists vs. bored commuter and the opportunity cost to play something crappy is significantly higher.

I agree there’s some structural things there — the audience is much smaller, and also thus savvier, yes. There are stats out there talking about how the actual try-many-games audience of Steam is only around 2m people.

The opportunity cost — actual cost, heck!) — is higher, but with sales, it’s still not that high. The majority of all copies of games are bought during sales, and a lot of games go for bargain basement prices.

> If I sit down at my PC to game, I have a number of installed games I can choose to jump into (LoL, FFXIV, Rimworld are my current go-to’s) or I can comb through a number of games that I want to play, but haven’t started yet, or (since I’m responding to Raph Koster) I can hunt down a 1999-era UO private server and relive my nostalgic glory days. I will never sit down and say “You know what I need? An uninspired Bejeweled clone!” and start hunting through Steam.

I don’t get the point you are making here. You can play something you have already played, play something you got but haven’t yet, or go looking for something? Mobile gamers and PC gamers both engage in those patterns. Do you mean you never say “Wow, I wish I had a nice RPG, let me go look for one?”

> gaming isn’t binary between having AAA development or having the app store

Totally agree. The real issue I am pointing at with Steam versus App Store is that both are engaging in “race to zero” — gradual lowering of viable price points. Sales on Steam have been pushing average prices down for quite some time, and these days the average Steam player has far more games than they can actually play (or *will* actually play for that matter).

Just about the Steam sales and gamer inventory: Doesn’t a game like PUBG or ARK before it show that when something great comes along, no matter the box price or what gamers have going, they will flock and support it? And that support exists even without a Steam sale?

Now if we want to say that such things are getting rarer, maybe, but I’m not fully convinced of that either. The top sales chart almost every week contains new releases at full price, along with sale items. Combine this with the fact that many games DO have reasonable MTX (more money than just the box for the devs), and I still don’t see how things today are so much worse for devs that make good games than in days past prior to Steam, or with Steam but prior to MTX being more accepted.

App stores certainly raced to zero, and super fast, but the same trend ISN’T happening on Steam. There is not a flood of good free games that dominate the charts like there is on mobile. Starting prices aren’t tanking (not every game starts at $60, but at the same time not many start at $10 or less either).

I’m now really curious what examples (specific games) you have seen in recent years to support this.

Just as a point of order — my point is that these pressures are part of why even the *reasonable* MTX exists at all. I wasn’t making an argument about “unreasonable MTX,” but about MTX in general increasingly taking over from single-sale games.

“the data (featured in the table below) shows the total overall first month sales of all indie titles has increased by 25 percent since 2015, although mean average revenue dropped off by 50 percent during that time. It also suggests the top 10 titles don’t seem to be affected as much by the switch to Direct, with Galyonkin explaining “it’s the long tail that suffers.””

and

“the overall number of indie releases has more than doubled since 2015, but total revenue only went up by 25 percent.”

This isn’t the only place I have been hearing similar — just the easiest to find with public numbers. Bear in mind SteamSpy over-reports revenue pretty drastically, by almost double according to some.

I really don’t like data that looks at all Steam games because there are hundreds of shovelware titles for various reasons (card farming, achievement farming) released that aren’t really games, on top of the ‘games’ that are of such low quality that they also shouldn’t actually count as competition for a decent dev.

The difference is that on PC people are more passionate, while on mobile most people (myself included really) do just glance at the top chart if I have an opening for a time slot, so clutter is more an issue, especially since trying something that is free is also way more common on mobile.

The top list on Steam isn’t full of junk, even if Steam does have hundreds of such titles. I don’t see that changing. The top list in the app store basically is junk or older established titles, because that’s how it works in mobile today. They really are very different, and PC gaming won’t slope down to what mobile is today.

Mmm… I think it’s important not to do a disservice to the mobile audience. The core mobile audience is as passionate as PC gamers are, playing games that are often as deep, just different. They’re super-imitative of one another, but that’s not because they are bad games.

It’s way way bigger as a market, of course, so there are more of every segment in there — and there’s zero barrier to entry, so there’s supercasuals that just don’t exist in PC.

The top list in the App Store is mostly service games, because service games grow and stick, which was my point in the first place.

Again, it’s not that they would reach equivalency, but that they follow the same trendlines.